Credit Ratings?
Will it adversly affect my credit if I open a new credit card and close an old one that I rarely use? I opened an AmEx account about 4 months ago and I always pay in full every month. I know that currently my credit rating is very very good. I'm hoping to apply for a mortgage in a few months, and don't want to damage my rating
Public Comments
- Making too many changes hurts your rating. However, I doubt if one change will hurt it if your credit is already good. Make sure you pay the old card off and close it if you do get a new card.
- As long as you pay on time you will not have any issues with your credit. It will more that likely help your rating if you buy and pay monthly, just don't overuse at all.
- If the Amex is one where you do not have to pay the entire balance off every month, it may hurt your credit rating to close it. This will be true if you are carrying anything less than zero balances on any of your credit cards because your debt to credit ratio will be affected. This aspect of your score counts between 35-40 percent of the overall FICO/Vantage. If the Amex is one where you must pay the balance off in full every month, there should be very little damage done, if any. Changes to this type of Amex do not really matter as long as there is no balance on the card and you have at least two other credit cards. Carrying less than 2-3 credit cards can affect your score. It is also a good idea to clean up your credit record by updating your employment record and clearing out any old addresses - things like that.
